The ratings on Tucson Electric Power Co., a wholly owned subsidiary of UniSource Energy Corp., reflect an average business profile characterized by strong annual customer growth (2.7%), a stable customer base, and profitable power pool sales. These strengths are offset by a contentious regulatory environment, a retail rate freeze, significant industrial concentration, Unisource's growing nonregulated businesses, and weak financials. Tucson Electric serves more than 340,000 electric customers in the greater Tucson, Ariz. metropolitan area in Pima County and parts of Cochise County. Tucson Electric also sells electricity to other utilities and power marketing entities in the western U. S. Residential, commercial, and industrial customers represent 90%, 9%, and 1% of the customer base, respectively. The industrial sector includes copper mining,
